IBM's results weren't surprising, since it's repeatedly struggled to offset the slow growth of its legacy IT services, on-site software, and hardware businesses with its newer cloud-based businesses. Its stock lost about a quarter of its value and reinvested dividends only gave investors a total return of 3% -- compared to a total return of nearly 270% for the S&P 500 over the same timeframe. IBM certainly looks cheap at 10 times forward earnings with a hefty forward dividend yield of 5.5% -- but is it a value stock, or a value trap?
International Business Machines' (NYSE: IBM) has focused more on its growth businesses, such as cloud computing and artificial intelligence (AI), in recent years. Considering the company's current low valuation and the challenging transformation it has set for itself, is IBM stock a buy? During the earnings call, CEO Arvind Krishna justified this underwhelming performance with customers delaying projects and signing shorter service engagements amid economic uncertainty.
The IBM (NYSE: IBM) board of directors today declared a regular quarterly cash dividend of $1.63 per common share, payable March 10 , 2021 to stockholders of record February 10 , 2021. IBM has paid consecutive quarterly dividends every year since 1916.